OPA’s primary finding is that SHEFA did not operate in a fiscally prudent manner as evidenced particularly by its use of and excesses accorded contract employees, improper payments to some Board members, and the hiring or contracting of three persons or entities to perform duplicative work (the employee, a contractor, and the Board).

OPA notes that SHEFA has similar eligibility requirements (though SHEFA applicants must be residents of Saipan) and requires similar documentation as that required by the CNMI Scholarship Office. Therefore, the Saipan and Northern Islands Legislative Delegation (“SNILD”) might consider consulting with House and Senate members to determine whether local legislation should and can be amended to consolidate SHEFA’s administration with the CNMI Scholarship Office. A consolidation of the administrative functions between SHEFA and the CNMI Scholarship Office could be structured without amendments to the eligibility of benefits criteria currently established in SHEFA’s Rules and Regulations.

OPA also determined that:

• SHEFA relied upon inadequate documentation to support students’ eligibility for and continuation in the program, deadlines were malleable and exceptions were made, the review form (an internal control) was not always properly filled out at the appropriate times or at all, and the check disbursement procedure was notalways followed.

• SHEFA hired two contractors where it appears that it should have hired employees. Both contractors are CNMI government retirees and may have been in essence “double-dipping”. One contractor had a contract dubious in several respects as it contained duplicative deliverables and had highly unusual payment
  schedules.

• There was inadequate documentation to support the payments made to some SHEFA Board members. Some board members were compensated for work other than Board meetings, and the Board did not fully comply with PL 15-32, The Boards and Commissions Reform Act of 2006.

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